Environment

Developing Responsibily, And Paying For It

Nayan Chanda, the editor of YaleGlobal Online, exhorts developing countries to “develop responsibly,” and not “shirk their role as co-managers of the planet as they did at the climate summit.”

He has a point. The recent climate summit came out with very little in the way of concrete actions, except a declaration of intent to keep global temperature rise limited to 2 degrees C or less. As international treaties go that is decidedly weak, particularly given the urgency of the issue with the expiry of the Kyoto Protocol in 2012.

The question, of course, is who will pay for a new framework. And it is here that Chanda is being unreasonable in placing any responsibility on the developing world. Quoting Figueres at the Taellberg Summit, he says the world must undergo three “decouplings.” The first two are particularly relevant.

Firstly, decouple growth from carbon emissions. Contrary to the common belief that reducing carbon emission is a costly undertaking, significant gains can be made through efficient use of energy. The development of renewable energy and associated technologies also opens up good business opportunities while mitigating the effects of climate change.

The second decoupling is essentially for developed countries. “We have to decouple our personal satisfaction from over-consumption,” he said, pointing to the carbon cost of excessive consumption of natural resources by the developed world. “In our world today, one billion people over-consume and are wasteful, and six billion people do not have enough.”

Nobody can argue that both decouplings are essential. The question, of course, is in which order should they occur? Should developing countries decouple their growth before having achieved higher living standards, even if the developed world continues with its profligate ways? More important, who will pay for these two decouplings? Should developing countries pay for adopting a low-carbon economy, even if it reduces their growth rates and in the process compromises their only defense (rapid growth) against climate change?

Chanda is right to point out that developing countries will suffer more from climate change, and India will suffer most. But as Thomas Schelling pointed out, “the best way for developing countries to mitigate global warming is through economic growth.” Yet, the developed world has so far put forward no substantive proposals, backed by serious money, to help poor countries adapt to or insure against climate change. Their entire focus has been on mitigation, so that the rich countries can avoid having to decouple their living standards from carbon emissions.

Given the unwillingness of the US and Europe to fund a low-carbon economy elsewhere, developing countries only have two options at present – to develop rapidly and ignore long-term impacts or to develop slowly at their own cost. Noone can blame them for taking the first option.

This is not to say that developing countries are inactive. India, a country often cited as being obstructionist in climate negotiations, is one of the largest producers of wind energy and earlier this year unvieled two major initiatives.

The first is to improve energy efficiency through ratings on a range of electronic goods, as well as benchmarks for various industrial sectors, and a “a trading scheme centred on energy efficiency certificates that could possibly expand to renewable energy. The plan involves creating a market-based mechanism that would allow businesses using more energy than stipulated to compensate by buying energy certificates from those using less energy or using renewable energy.”

The second initiative, still in the planning phase, can best be described as the most ambitious solar power project in the world. In late May, the Indian government revealed plans to harness 200 GW of solar energy by 2050. By 2020, India hopes to have 20GW of additional capacity at a cost of USD 20 billion.

Interestingly, and to demonstrate the fallacy in Chanda’s argument, the first is being paid for domestically – because it is economically viable and does not risk reducing growth. For the second, however, the Indian government stepped back from funding the upfront costs and may ask international sources to pay for it.

The Indian Solar Mission is a clear example of a developing country accepting its responsibility and attempting to decouple growth from carbon emissions. But such decouplings will be expensive once the low-hanging fruit (e.g. energy efficiency) have been taken. So if Mr. Chanda is serious and wants to see responsibility accepted where it lies, he should exhort developed countries to put their money where their mouth is. Then we can get on with the business of defining a post-Kyoto framework.

© 2009 The Discomfort Zone.